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Why PriceSmart Is Poised to Pop

Market-trouncing returns could be written in this 5-Star.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, PriceSmart(NASDAQ:PSMT), which operates shopping warehouse clubs in Latin America and the Caribbean, has earned a coveted five-star ranking.

With that in mind, let's take a closer look at PriceSmart and see what CAPS investors are saying about the stock right now.

PriceSmartfacts

Headquarters (founded)

San Diego, Calif. (1994)

Market Cap

$2.2 billion

Industry

Hypermarkets and supercenters

Trailing-12-Month Revenue

$2.1 billion

Management

CEO Jose Laparte (since 2010)

CFO John Heffner (since 2004)

Return on Equity (average, past 3 years)

17%

Cash/Debt

$84.4 million/$82.4 million

Dividend Yield

0.8%

Competitors

Carrefour

IGA

Wal-Mart Stores (NYSE: WMT)

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 96% of the 511 members who have rated PriceSmart believe the stock will outperform the S&P 500 going forward.

I live in Costa Rica and understand what PriceSmart is to the [L]atin market. EVERY day, literally EVERY DAY, there is a line out the door to open, the parking lots stay full ALL DAY LONG until closing. Not to mention that personally it is one of the only places I can buy things and not feel like I am paying through my nose in [Value Added Tax], which is common in Latin America. The business model is sound, the leadership is who made the business model to begin with (Price, et al), and there are plenty of green field growth opportunities on this one. Just compare their fundamentals to industry averages ... it's all there.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.